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Judgment
S. Abdul Nazeer, J.—The petitioner has filed this civil miscellaneous petition u/s 11(6) of the Arbitration and Conciliation Act, 1996, (for short ''the Act'') for appointment of an Arbitrator to resolve the dispute which has arisen in relation to Purchase Orders at Annexures-D and E dated 22.6.2010 and 21.10.2010 respectively.
The petitioner is a Private Limited Company engaged in the business of designing, developing, manufacturing, assembling, buying, selling, importing, exporting, distribution, marketing of all kinds of micro macro, nano-engineering systems.
The respondent placed purchase orders in relation to MTS dated 22.6.2010 and ETS dated 21.10.2010. The contention of the petitioner is that he has supplied the aforesaid materials in furtherance of the contract.
It is the case of the petitioner that while executing the work, the petitioner came to know that the job is not only to fabricate as per the design given by the respondent, but also detailed designing, drafting and to accommodate modifications suiting changes required by the respondent. For execution of the work as above, the petitioner had to incur extra cost. The petitioner sent a notice as per Annexure-F, claiming extra cost incurred by him under various accounts and also informed the respondent the factors that had contributed for the delay. However, the respondent has not sent reply to this demand notice. Finally, the petitioner issued notices at Annexures-V and Y dated 31.10.2013 and 20.01.2014 respectively, calling upon the respondent to appoint an arbitrator for resolution of the dispute. The respondent has not sent reply to the said notices. Therefore, the petitioner has filed this petition seeking appointment of an arbitrator for the resolution of the dispute.
The respondent has not filed objections to the petition.
Learned counsel for the petitioner in his submission has reiterated the contentions urged in the petition.
Learned counsel for the respondent submits that he has no objection for referring the matter to the named arbitrator in the agreement.
At this stage, learned counsel for the petitioner submits that the respondent has forfeited its right to appoint an arbitrator. In this connection, he has placed reliance on the decision of the Hon''ble Supreme Court in Deep Trading Company Vs. Indian Oil Corporation and Others, . He submits that this Court may appoint an arbitrator for the resolution of the dispute.
I have carefully considered the arguments of the learned counsel made at the bar and perused the materials placed on record.
The purchase orders referred to above contain an arbitration clause, which is as under:
"Any dispute, disagreement or question arising out of or relating to or in consequence of the Contract or to its fulfillment, or the validity of enforcement thereof which cannot be settled mutually or the settlement of which is not herein specifically provided for, shall within 30 days from the date, either party informs the other in writing that such dispute, disagreement exists, be referred to the arbitration. The Arbitrator shall be a person not below the rank of Joint Secretary and shall be appointed by the Secretary, Department of Spaces. This arbitration proceedings shall be conducted at ISAC.
The arbitration proceedings shall be conducted in accordance with the Arbitration and conciliation Act, 1996 (Act 26 of 1996) as amended from time to time and the decision of the Arbitrator shall be final and binding on the parties thereto. Each party shall bear its own cost of preparing and presenting its case. The cost of Arbitration including the fees and expenses of the Arbitrator shall be shared equally by the parties unless the award provides otherwise. The enforcement of the award shall be governed by the rules and procedures in force in the State of Karnataka in which it is to be executed.
Performance under this Contract shall, however, continue during arbitration proceedings and no payment due or payable by the parties hereto shall be withheld unless any such payment is/or forms a part of the subject matter of arbitration proceedings".
In terms of this clause, the petitioner has informed in writing to the respondent the dispute which has arisen in relation to the purchase orders. However, the respondent has not taken any steps for resolution of the dispute. Therefore, the petitioner has sent notices at Annexures-V and Y, calling upon the respondent to appoint an arbitrator to resolve the dispute. The respondent has failed to send reply to the said notices. It has failed to appoint an arbitrator till this day. In the circumstances, it has forfeited its right to appoint an arbitrator (See:- Deep Trading Company Vs. Indian Oil Corporation and Others, ). Therefore, it is just and proper to appoint an arbitrator for resolution of the dispute.
In the result, civil miscellaneous petition succeeds and it is accordingly allowed. Hon''ble Sri. Justice Chandrashekaraiah, a former Judge of this Court, is requested to enter upon the reference and arbitrate over the dispute and conduct arbitration proceedings at Arbitration Centre in terms of the Arbitration Centre - Karnataka (Domestic and International) Rules, 2012.
Registry is directed to send a copy of this order to the Arbitration Centre, Bangalore, forthwith.